A little bit of good news for families set on sending their kids to private colleges: Tuition increases are slowing down.
Tuition and fees at private colleges and universities rose 3.9% for the current academic year, the lowest annual increase in at least 40 years, according to the National Association of Independent Colleges and Universities.
In each of the previous two school years, the increase was about 4.5%. The hikes averaged 5.7% a year from about 1998 through 2008, according to the group. “Private college leaders are listening, and working hard to keep students' out-of-pockets costs as low as possible and provide the best value for the tuition dollar,” said David Warren, president of the NAICU.
In addition to a number of schools' trimming tuition costs or freezing rate increases, some private colleges and universities are instituting programs to make themselves more attractive to value-oriented students and their parents. These include four-year graduation guarantees, three-year degree programs, joint bachelor's and master's programs, and degree partnerships with community colleges.
Schools also have boosted student aid. Student aid budgets at the 445 institutions that responded to the NAICU survey increased an average of 6.2% for the 2012-13 school year, the association said.
The 3.9% rate increase is the lowest on record, but it still tops the increase in the inflation rate. The Consumer Price Index rose 3% in 2011, according to the government. In 2010, the CPI increased a mere 1.5% in 2011, while the cost of college went up three times that amount.
Mr. Warren said average tuition hikes probably will always outstrip inflation.
“Not only in higher education, but other service industries where employees are highly trained, the expenses are going to be higher overall because of having to hire and retain those people,” he said. “That reality is built in, but institutions are trying to find ways at every turn to reduce the overall costs.”
According to The College Board, the published tuition and fees at private nonprofit four-year colleges and universities averaged $28,500 in 2011-12. That number jumps to $38,589 when room and board is added in.
The average net cost for full-time students at private colleges — the amount families pay after financial aid is awarded — is about $12,970 a year, however.